Key Takeaways:
- Twilio is executing a comprehensive customer engagement platform expansion through AI-powered communication solutions and multi-product selling.
- TWLO could reasonably reach $174/share by December 2029, based on our valuation assumptions.
- This implies a total return of 39% from today’s price of $125/share, with an annualized return of 8% over the next 4.1 years.
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Twilio (TWLO) is establishing new benchmarks in customer communications through strategic platform expansion, addressing AI-powered voice solutions, conversational intelligence, and integrated engagement tools across enterprise, ISV, and self-serve markets.
Twilio serves enterprise customers globally through its comprehensive communications platform, which spans messaging, voice, email, and emerging AI agent technologies. These solutions are delivered through developer-friendly APIs and advanced customer engagement capabilities.
Core offerings include programmable messaging services, voice AI infrastructure, authentication solutions like Verify, and contact center platforms such as Flex that enable businesses to build personalized, omnichannel customer experiences at scale.
The communications leader delivered third-quarter 2025 revenue of $1.3 billion, a 15% year-over-year increase on a reported basis, with record non-GAAP operating income of $235 million.
Twilio continues to demonstrate strong execution across customer expansion initiatives under the leadership of CEO Khozema Shipchandler and the senior management team.
The company grew its voice AI customer revenue nearly 60% year-over-year, with the top 10 voice AI startups increasing 10x. It also achieved a record free cash flow of $248 million and returned $350 million to shareholders through buybacks in the quarter.
TWLO stock went public in 2016 and has since returned over 340% to shareholders. However, it also trades 72% below record highs, allowing you to buy the dip.
Let’s see if you should own TWLO stock at the current multiple.
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What the Model Says for TWLO Stock
We analyzed the upside potential for Twilio stock using valuation assumptions based on its customer engagement capabilities and market expansion opportunities across messaging, voice AI, and software add-on products.
Analysts recognize an opportunity ahead for Twilio stock given its proven execution track record, technology innovation leadership, and systematic approach to building competitive advantages.
Twilio’s diversified product strategy provides multiple growth vectors, while the AI agent initiative validates that comprehensive solution delivery can drive customer value creation and operational leverage.
Based on estimates of 8% annual revenue growth, 19.5% operating margins, and a normalized P/E valuation multiple of 27x, the model projects Twilio stock could rise from $125/share to $162/share.
That would be a 28% total return, or a 13% annualized return over the next 2.1 years.
Our Valuation Assumptions
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Our Valuation Assumptions
TIKR’s Valuation Model lets you plug in your own assumptions for a company’s revenue growth, operating margins, and P/E multiple, and calculates the stock’s expected returns.
Here’s what we used for Twilio stock:
1. Revenue Growth: 8%
Twilio delivered an outstanding third-quarter 2025 performance, with 15% reported revenue growth and 13% organic growth, driven by momentum across messaging, voice, and software add-ons.
Growth drivers include expanding voice AI adoption with revenue up 60% year-over-year, messaging revenue growth in the high teens for the second consecutive quarter, and software add-on products.
Twilio saw 20%+ growth from both ISV customers and self-serve channels, while signing its largest deal in company history—a nine-figure renewal with a leading cloud provider spanning multiple products.
We used an 8% forecast, reflecting Twilio’s ability to capture AI communications demand while diversifying across enterprise, ISV, and developer market segments.
2. Operating margins: 20%
In the third quarter of 2025, Twilio’s non-GAAP operating margin reached 18%, up 190 basis points year-over-year, driven by strong revenue growth and continued cost discipline across the organization.
However, gross margins faced pressure from carrier pass-through fees, declining 280 basis points year-over-year to 50.1%, primarily due to a $20 million increase in Verizon A2P fees that impacted sequential performance.
TWLO targets sustainable margin improvement through several initiatives: accelerating high-margin products like voice and software add-ons, implementing pricing actions across the business, investing in platform efficiency improvements, and leveraging AI to drive go-to-market productivity.
We forecast 19.5% operating margins, reflecting management’s proven ability to expand profitability through shifts in product mix toward higher-margin offerings, operational leverage from volume growth, and continued cost discipline.
3. Exit P/E Multiple: 27x
Twilio stock currently trades at a next-twelve-months P/E multiple of 24.1x, reflecting its growth profile, market positioning, and technology capabilities across the customer communications platform market.
We maintain a 27x exit multiple given Twilio’s execution capabilities, customer expansion strategy through AI-powered solutions, and systematic approach to building sustainable competitive advantages through developer-friendly platforms and comprehensive multi-product offerings.
The company’s dollar-based net expansion rate of 109% demonstrates strong customer retention and upsell momentum.
Moreover, the shift toward solution selling and agent productivity bundles positions Twilio to command premium valuations as it captures more wallet share from existing customers.
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What Happens If Things Go Better or Worse?
Different scenarios for TWLO stock through 2030 show varied outcomes based on CTV adoption rates and AI innovation: (these are estimates, not guaranteed returns):
- Low Case: Voice AI adoption slows and margin pressure intensifies → 3% annual returns.
- Mid Case: Successful multi-product expansion and steady margin improvement → 8% annual returns.
- High Case: Strong voice AI momentum and significant margin expansion → 14% annual returns
Even in the conservative case, Twilio stock offers modest returns supported by market positioning and proven ability to execute large-scale deployments while maintaining technology leadership across diverse customer requirements.
The upside scenario for TWLO stock could deliver attractive performance if it successfully scales voice AI adoption while maximizing solution selling opportunities and achieving targeted margin improvement through higher-value product delivery and operational efficiency gains.
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How Much Upside Does TWLO Stock Have From Here?
With TIKR’s new Valuation Model tool, you can estimate a stock’s potential share price in under a minute.
All it takes is three simple inputs:
- Revenue Growth
- Operating Margins
- Exit P/E Multiple
If you’re not sure what to enter, TIKR automatically fills in each input using analysts’ consensus estimates, giving you a quick, reliable starting point.
From there, TIKR calculates the potential share price and total returns under Bull, Base, and Bear scenarios so you can quickly see whether a stock looks undervalued or overvalued.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
